TMN - eBay

EBay drops on weak outlook as pandemic sales fade

Shares of eBay Inc. declined on Wednesday’s extended trading after providing weak second-quarter revenue guidance, citing the fading pandemic-driven sales.

The e-commerce platform plummeted 6.47% or 3.52 points to $50.90 per share. This downturn came after the stock gained 1.80% or 0.96 points to $54.42 per share in the regular-hours market. It also dragged $1.20 billion to the company’s stock valuation.

EBay forecasted Q2 revenue between $2.35 billion and $2.40 billion, lower than the analysts’ consensus of $2.54 billion. In addition, the company expects its earnings in the range of $0.87 to $0.91 per share, below the market estimate of $1.01.
Its full-year forecast was also below expectations.

For 2022, the company anticipated revenue of $9.60 to 9.90 billion, missing Wall Street’s figure of $10.40 billion. Then, the company estimated annual EPS of $3.90 to $4.10 per share, compared to the $4.34 projected.

The gloomy view mirrors the expected hit from a return of pre-pandemic shopping habits and mounting high inflation, which is likely to curtail consumer spending. It also followed the downbeat earnings results of e-commerce giant Amazon.

In the first quarter, the firm announced earnings per share of $1.05, slightly above the analysts’ projection of $1.03.

Likewise, its revenue came in at $2.48 billion, surpassing the anticipated $2.46 billion. However, this key metric also represented a decline of 6.00% year over year.

Nevertheless, eBay CEO Jamie Iannone stated the business had delivered another strong quarter, at the high end of their expectations. She mentioned that the company remained strong despite the current macroeconomic headwinds.

She also reassured investors that the platform remained confident in its long-term strategy centered on sustainable growth.

Ukraine war impact on eBay

Meanwhile, in a post-earnings call, eBay CFO Stephen Priest mentioned that the business also took a hit from the Ukraine war. The geopolitical crisis has weighed on e-commerce traffic in its key markets of Germany and the United Kingdom.

In addition, he anticipated the impact of the conflict to continue through this year. Subsequently, active buyers on the site edged down 13.00% to 142.00 million in the quarter.

Moreover, the e-commerce sector has also grappled with mounting costs in recent months. The business struggled with the tight labor market and the ongoing supply chain crisis.

  • Before the post-trading, eBay stocks skidded 18.53% or 12.38 points since the start of the year. In the past month, it dropped 3.51% or 1.98 points.
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